Power Minister discusses ways with banks to improve fund flow

Power Minister Jyotiraditya Scindia today met banks and financial institutions and discussed ways to iron out problems that block investment to the sector, which is facing a severe finance crunch.
"Bankers raised problems faced while lending to power sector projects ... Fuel availability and environment hurdles are also matters of concern," Scindiatold reporters after the hour-long meeting in New Delhi.
The meeting was attended by representatives from PSU banks and lending institutions such as Punjab National bank, Central Bank, Power Finance Corporation and REC.
"We discussed a gamut of issues, from the issue of gas availability to the issue of the health of the discoms to the issue of aspects of the Financial Restructuring Package (FRP) for the discoms," Scindia said.
"The FRP will enhance the health and vitality of these discoms and that is what is the ultimate purpose is. The discoms which have done really well will get a huge jump up in ratings," he said.
The government, last year, approved restructuring debt of Rs 1.9 lakh crore of ailing state electricity distribution companies (discoms).
"We are going to pass a rating system for all the discoms in the country effective April 1, this year, so that we are able to bring in transparency and accountability in generation, transmission and distribution in order to make the sector viable," he said.
"CARE and ICRA will work on rating discoms," he said, adding that the lending to discoms will be based on ranks given by the agencies.
Bankers are shying away from lending to the power sector due to delay in environmental clearances and fuel scarcity issue, among others. Many hydro, thermal and gas based projects are facing financing issues.
The meeting also discussed the much-awaited Standard Bidding Documents (SBDs) for the power projects, which would amend the existing documents as per the evolving requirements.
"The SBDs are almost final and we are waiting for an EGoM date so that we can take that forward," he said. An Empowered Group of Ministers will finalise the revised SBDs.
The Minister also indicated that he intends to meet the stakeholders more often in the future.
"This is not a one of meeting. I do intend to meet with all stakeholders on a six monthly basis or a quarterly basis as the need may be and take this process forward," he said.
On the tariff issue, Scindia said regular tariff revision is essential not just to ease lending but also to boost private sector investment.